Amid recent media reports that President Trump is planning to issue an executive order aimed at expanding offshore drilling opportunities for petroleum exploration and production companies – opportunities that had been restricted by the Obama administration – Volkswagen (“VW”), one of the world’s largest automobile manufacturers, has announced its plans for investing the first $500 million of the $2 billion that it is required by court order (associated with the diesel emissions litigation) to invest in zero emission vehicle (“ZEV”) infrastructure.
Of the $500 million, $200 million would be invested in California, and the other $300 million elsewhere in the United States. Virtually all of the $500 million would be spent on the installation of charging stations, according to VW. Under VW’s plan, the chargers would be located on highways spanning 39 states and separately in 16 metropolitan areas. Reportedly, VW’s plans call for 1,100 fast charging stations to be built, with installation to occur within 30 months. The United States Environmental Protection Agency and the state of California are currently reviewing the plans.
For context, Tesla states that it has 828 “Supercharger stations” in the United States, with 5,339 “Superchargers.” This network, of course, has been built out over a number of years.
Charging stations require a supply of electric power, of course, but of the fossil fuels likely to be used to generate that electric power, oil is the least likely to be chosen, for a variety of long-standing reasons. Currently, less than one percent of the nation’s electricity is generated by combusting oil. To the extent that electric powered automobiles gain market share, petroleum-fueled vehicles will, by definition, lose market share.
Much is uncertain about the extent to which the current administration’s adoption of policies in support of the petroleum and coal industries will translate into tempering (or possibly even expansion) of production and sales of zero emission vehicles. But it is safe to say that the ZEV infrastructure investment mandates that were built into the VW diesel emission settlement should provide a meaningful boost to the vehicle fueling transformation that many wish to see. This will happen without any court challenges – of the kind that face projects for Artic or Atlantic off-shore drilling – in the way.